The Senate overcame a key procedural hurdle early Monday morning on the arduous journey to approving health care reform legislation with a 1:00 am vote approving an amendment by Senate Majority Leader Harry Reid, D-Nev., that made changes to secure the 60 votes needed to end a filibuster.

Among the changes was the elimination of a 5 percent tax on elective cosmetic surgery; the Reid amendment instead imposes a 10 percent tax on indoor tanning services. Allergan, the maker of Botox, had been leading a lobbying campaign against the so-called “bo-tax” while the indoor tanning industry has been facing increased scrutiny from the Food and Drug Administration about the dangers of ultraviolet rays used in tanning beds. The tanning service tax is estimated to raise $2.7 billion over 10 years.

The amendment also includes a 0.9 percent increase in the Medicare payroll tax for individuals who earn more than $200,000 a year and couples who earn more than $250,000 annually. An earlier version of the bill would have imposed a 0.5 percent increase in the Medicare payroll tax.

More small businesses will be eligible for tax credits to offset the costs of health insurance under the amendment. Businesses with fewer than 25 employees and average annual wages under $50,000 would be eligible for the tax credits. The tax credits would be offered on a sliding scale, with up to 50 percent of the premiums covered for businesses with average annual wages of less than $25,000.

In addition, the amendment also adjusts the “fees” on health insurance companies and medical device makers. An earlier version of the bill would have imposed $6.7 billion in new taxes on health insurers starting next year. Instead the tax will start at $2 billion in 2011 and increase to $10 billion in 2017. The industry fee of $2 billion a year on medical device manufacturers will start in 2011 instead of 2010.

Longshoremen were also added to the list of those in high-risk professions who will not be subject to the full tax on so-called "Cadillac" high-value health insurance plans. Other professions already on the list include police, firefighters, miners, construction workers and emergency first responders.


The bill also dropped the public health insurance option as well as the proposed Medicare buy-in for those aged 55 to 64 without health insurance in order to win the support of Sen. Joseph Lieberman, I-Conn.

Other changes in the amendment favored the home state of Nebraska Senator Ben Nelson, who provided the 60th vote needed to overcome the unanimous Republican filibuster. Nelson insisted on stricter language barring the use of federal funds for abortion in the policies offered through the new health insurance exchanges. Nebraska will also be the only state that will not have to pay for the expansion of Medicaid under the bill.

The debate on the amendment was acrimonious as senators blamed each other’s party for the late-night vote. “Make no mistake: If the people who wrote this bill were proud of it, they wouldn’t be forcing a vote in the dead of night,” said Senate Minority Leader Mitch McConnell, R-Ky.

Reid pointed out, however, that the vote was only taking place at that hour because of the procedural roadblocks that the Republicans had erected. “On average, an American dies from lack of health insurance every 10 minutes,” he said. “That means, in the short time I have been speaking, our broken system has claimed another life.”

Several more procedural votes are scheduled later in the week, with a final vote on the bill scheduled for Christmas Eve on Thursday.


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